Brazil telecommunications

Vivo to invest US$1.8bn in Brazil in lieu of paying a fine

December 19th 2017 | Brazil | Fixed | Multiple companies

Brazil's telecoms regulator has asked Telefónica SA's Vivo to invest about R5.5bn (US$1.8bn) in the country's telecoms sector, in place of paying a fine of R3.1bn imposed on it earlier. The regulator, Anatel, revised the terms to settle the regulatory fines after coming under criticism from the country's Court of Auditors of the Union, according to local media reports on December 15th citing a supervisor at Anatel.

Under the agreement, Vivo will deploy 3G and 4G services in certain areas, set up fibre network, offer ultra-high-speed broadband and boost mobile and internet connectivity across 624 municipalities in Brazil. The operator will complete a total of over 900 projects, failing which it will have to pay an increased penalty of R9.8bn to the regulator.

Anatel's earlier agreement with Vivo had come under criticism, reportedly for the criterion used to choose the cities that would receive high-capacity network as part of the settlement. The new plan focuses on areas that have not already benefited from telecoms investment.

Vivo is the largest telecoms player in Brazil. It accounts for a 31% share of the market, followed by TIM Brazil at 25%, Claro at 24.9% and Oi SA at 17%. Vivo's parent company, Telefónica, had strengthened its foothold in Latin America with the purchase of Global Village Telecom, the Brazilian broadband business of France's Vivendi SA, for US$10bn in 2015.